The EUR/USD pair dipped at the start of the week ahead of the Fed meeting but rebounded on Tuesday following positive news about Eurozone economic growth.
Possible technical scenarios:
The EUR/USD pair maintained its position above the 1.0801 support level, indicating potential growth toward the 1.0888 resistance level.
Fundamental drivers of volatility:
This week's euro dynamics will hinge on the US dollar's response to the Fed's decision and the employment report. The Fed's interest rate decision, expected to remain at 5.50%, will be announced on Wednesday at 6:00 p.m. GMT.
Additionally, the US labor market report for July will be released at 12:30 p.m. GMT, forecasting a non-farm employment increase of 177,000, down from the previous 206,000. The average hourly wage growth is expected to stay at 0.3%, with the unemployment rate steady at 4.1%.
Intraday technical picture:
As evidenced by the 4H EUR/USD chart, the pair is nearing the resistance at 1.0842 marked with dotted lines. The strength of this resistance will be put to the test by potential increases in US dollar volatility this week.
The GBP/USD pair is trading this week in anticipation of a possible rate cut by the Bank of England and signals regarding the subsequent easing of monetary policy.
Potential technical scenarios:
According to the daily chart, the GBP/USD pair is holding above the 1.2846 support level, despite attempts to break it out. From this point, a price recovery to the 1.2989 resistance level is possible. That being said, a breakout of 1.2846 and consolidation below it could send the pair to the next downside target of 1.2792.
Fundamental drivers of volatility:
The pound and the dollar will be highly sensitive to the rhetoric of their central banks this week. The Federal Reserve's interest rate decision will be announced on Wednesday at 6:00 p.m. GMT, with the rate expected to remain at 5.50%.
Aside from that, the US labor market report for July will be released at 12:30 p.m. GMT, forecasting an increase of 177,000 non-farm jobs, down from the previous 206,000. Average hourly earnings are expected to maintain a growth rate of 0.3%, with the unemployment rate steady at 4.1%.
The Bank of England's meeting results will be announced on Thursday at 11:00 a.m. GMT, with a forecasted rate cut from 5.25% to 5.0%.
Intraday technical analysis:
Judging by the unfolding situation on the 4H GBP/USD chart, the pair is holding above the 1.2846 support level, from which it could recover to the resistance at 1.2898 marked with dotted lines. However, the reactions of the dollar and the pound to the decisions of the decisions of the central bank could increase volatility and shift price targets.
Early this week, the USD/JPY pair is trading with anticipation of central bank meetings, which could significantly impact volatility.
Possible technical scenarios:
As we can see on the daily USD/JPY chart, the pair has climbed from the 153.09 support level to reach the 154.83 resistance. A pullback is possible from here, but if the price breaks and sustains above 154.83, the next target could be 157.10.
Fundamental drivers of volatility:
This week is expected to be volatile for the USD/JPY pair. On Wednesday at 3:00 a.m. GMT, the Bank of Japan will announce its interest rate decision, which is anticipated to remain at 0.10%. Investors will also be watching the Bank of Japan's Monetary Policy Report and the subsequent press conference at 6:30 a.m. GMT closely for further insights into future policy directions.
Later the same day, at 6:00 p.m. GMT, the Federal Reserve will reveal its interest rate decision, with expectations set for a hold at 5.50%. Prior to that, at 12:30 p.m. GMT, the US labor market report for July will be released, forecasting an increase of 177,000 non-farm jobs, down from the previous 206,000. Average hourly earnings are likely to grow by 0.3%, with the unemployment rate remaining at 4.1%.
Intraday technical picture:
According to the 4H USD/JPY chart, the price is currently testing the 154.83 resistance level. Depending on how both currencies respond to the news on Wednesday, the price could either break out this resistance and aim for 157.10 or fall back to test the 153.09 support.
The AUD/USD pair is consolidating this week after its recent decline, awaiting new fundamental cues.
Possible technical scenarios:
On the daily chart, AUD/USD has fallen below the 0.6582 level and is currently consolidating above the 0.6498 support. This consolidation could lead to an exit from this range or a movement towards either boundary, influenced by upcoming US economic data.
Fundamental drivers of volatility:
The pair’s movements this week will largely depend on fluctuations in the US dollar. On Wednesday at 6:00 p.m. GMT, the Federal Reserve will announce its interest rate decision, with expectations for it to remain at 5.50%.
Additionally, on Friday at 12:30 p.m. GMT, the US labor market report for July will be released. This report often impacts the US dollar, with forecasts suggesting a 177,000 increase in non-farm jobs—down from 206,000 previously. Average hourly earnings are expected to grow by 0.3%, and the unemployment rate should stay at 4.1%.
Intraday technical picture:
The 4H chart suggests that the AUD/USD pair is consolidating in the middle of the 0.6582-0.6498 range, with potential local movement towards either end of this corridor.
Oil prices started the week on a downward trend, primarily due to prevailing geopolitical risks that could disrupt supply chains.
Possible technical scenarios:
Given the unfolding scenario on the daily chart, Brent oil prices have dropped below the resistance level of 79.70. The next support level is at 77.25, indicating further potential for a decline.
Fundamental drivers of volatility:
Oil prices have stabilized near their lowest levels since early June, following concerns about demand in China. However, the Chinese government's commitment to economic stimulus and expectations of reduced crude oil and petroleum product inventories in the US are providing some support.
Continued disappointing economic data from China, the world's largest oil importer, is exerting downward pressure on commodity prices.
Intraday technical picture:
On the 4H Brent chart, black gold prices have found support at the local level of 78.49 marked with dotted lines. From this point, a rebound to the resistance level of 79.70 is possible. That being said, if prices break out 78.49 and consolidate below it, a further decline towards the 77.25 target could occur.
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